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The Cato
(NYSE:CATO)
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Rating:47Neutral
Price Target:
$3.50
▲(0.29% Upside)
Action:Reiterated
Date:07/10/26
The score is held back primarily by weak financial consistency (still negative operating profitability and negative/volatile free cash flow) and a very high P/E multiple. Technicals are somewhat supportive with the stock trading above key moving averages, and recent company news reflects improved near-term profitability, though partly helped by a one-time item and with noted consumer-demand headwinds.
Positive Factors
Revenue rebound and narrowing losses
A sustained revenue rebound and materially narrowed losses indicate the business is regaining demand traction and operating discipline. Over the next several months this trend improves the odds of reaching consistent profitability, reduces cash burn pressure and supports reinvestment in merchandising and e-commerce.
Negative Factors
Operating profitability still negative
Persisting negative operating margins and razor-thin EBITDA leave limited room to absorb sales softness or cost inflation. Until margins convert to sustainable positive operating profitability, the company remains vulnerable to revenue fluctuations and may need recurring cost actions that impair long-term growth and competitiveness.
Read all positive and negative factors
Positive Factors
Negative Factors
Revenue rebound and narrowing losses
A sustained revenue rebound and materially narrowed losses indicate the business is regaining demand traction and operating discipline. Over the next several months this trend improves the odds of reaching consistent profitability, reduces cash burn pressure and supports reinvestment in merchandising and e-commerce.
Read all positive factors
The Cato (CATO) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$67.26M
Dividend YieldN/A
Average Volume (3M)57.80K
Price to Earnings (P/E)343.5
Beta (1Y)0.77
Revenue Growth1.82%
EPS GrowthN/A
CountryUS
Employees7,000
SectorConsumer Cyclical
Sector Strength84
IndustryApparel - Retail
Share Statistics
EPS (TTM)N/A
Shares Outstanding18,195,206
10 Day Avg. Volume67,079
30 Day Avg. Volume57,801
Financial Highlights & Ratios
PEG Ratio0.14
Price to Book (P/B)0.37
Price to Sales (P/S)0.09
P/FCF Ratio-11.13
Enterprise Value/Market Cap2.61
Enterprise Value/Revenue0.27
Enterprise Value/Gross Profit0.81
Enterprise Value/Ebitda22.64
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
The Cato Business Overview & Revenue Model
Company Description
The Cato Corporation, encompassing its subsidiary entities, operates as a specialized vendor of fashionable clothing and accompanying accessories, with its primary market centered in the southeastern region of the United States. Its business model...
How the Company Makes Money
Cato generates revenue primarily by selling apparel, shoes, and fashion accessories directly to consumers. Its main revenue streams are (1) in-store retail sales across its branded store formats and (2) online sales through its e-commerce operatio...
The Cato Financial Statement Overview
Summary
Income Statement
44
Neutral
Balance Sheet
53
Neutral
Cash Flow
41
Neutral
| Breakdown | TTM | Jan 2026 | Jan 2025 | Jan 2024 | Jan 2023 | Jan 2022 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 654.67M | 653.81M | 649.81M | 708.06M | 759.26M | 769.27M |
| Gross Profit | 216.44M | 212.28M | 203.55M | 233.88M | 238.52M | 303.85M |
| EBITDA | 7.75M | 2.49M | -6.24M | -3.90M | 12.94M | 51.39M |
| Net Income | -228.00K | -5.91M | -18.61M | -22.59M | 41.00K | 34.91M |
Balance Sheet | ||||||
| Total Assets | 439.18M | 421.42M | 452.36M | 486.82M | 553.14M | 633.77M |
| Cash, Cash Equivalents and Short-Term Investments | 83.64M | 76.32M | 77.70M | 102.95M | 128.66M | 165.76M |
| Total Debt | 145.03M | 150.45M | 145.90M | 153.12M | 174.77M | 184.33M |
| Total Liabilities | 272.48M | 264.11M | 290.06M | 294.50M | 326.55M | 379.57M |
| Stockholders Equity | 166.71M | 157.31M | 162.30M | 192.32M | 226.59M | 254.20M |
Cash Flow | ||||||
| Free Cash Flow | -1.09M | -5.22M | -27.62M | -12.05M | -6.06M | 55.68M |
| Operating Cash Flow | 2.72M | -1.46M | -19.75M | 477.00K | 13.37M | 59.79M |
| Investing Cash Flow | -8.44M | -1.30M | 28.96M | 19.78M | 16.02M | -25.33M |
| Financing Cash Flow | -212.00K | -851.00K | -14.05M | -16.13M | -29.28M | -31.80M |
The Cato Technical Analysis
Positive
3.49
Price Trends
3.14
Positive
3.04
Positive
3.30
Positive
Market Momentum
0.05
Negative
60.93
Neutral
56.37
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CATO, the sentiment is Positive. The current price of 3.49 is above the 20-day moving average (MA) of 3.26, above the 50-day MA of 3.14, and above the 200-day MA of 3.30, indicating a bullish trend. The MACD of 0.05 indicates Negative momentum. The RSI at 60.93 is Neutral, neither overbought nor oversold. The STOCH value of 56.37 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for CATO.
The Cato Risk Analysis
The Cato disclosed 28 risk factors in its most recent earnings report. The Cato reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
The Cato Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
61 Neutral | $158.85M | -12.46 | -6.80% | ― | -8.42% | 79.65% | |
58 Neutral | $127.44M | -40.30 | -3.98% | ― | 1.69% | 93.35% | |
47 Neutral | $67.26M | 343.50 | -0.14% | ― | 1.82% | ― | |
47 Neutral | $24.85M | -5.17 | -326.53% | ― | -8.96% | 83.08% | |
45 Neutral | $35.00M | -0.86 | -32.66% | ― | -5.30% | -1323.39% | |
44 Neutral | $111.84M | 0.52 | -33.43% | ― | 16.39% | ― |
* Consumer Cyclical Sector Average
CATO
The Cato
3.47
0.35
11.22%
TLYS
Tilly's
4.12
2.65
180.27%
DXLG
Destination XL
0.62
-0.58
-48.33%
DLTH
Duluth Holdings
4.03
1.94
92.82%
RENT
Rent the Runway
3.35
-1.13
-25.22%
LVLU
Lulu's Fashion Lounge Holdings
8.64
3.96
84.62%
The Cato Corporate Events
Business Operations and StrategyExecutive/Board ChangesFinancial DisclosuresShareholder Meetings
The Cato Shareholders Approve Proposals at Annual Meeting
Positive
May 26, 2026
The Cato Corporation reported a sharp improvement in profitability for the first quarter ended May 2, 2026, with net income rising to $9.3 million, or $0.47 per diluted share, from $3.3 million, or $0.17 per share, a year earlier, on sales that in...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.